4. Electronic Theses and Dissertations (ETDs) - Faculties submissions

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    Factors contributing to transgressions in the procurement practices of state-owned entities (SOES): Eskom and Transnet
    (University of the Witwatersrand, Johannesburg, 2024) Moloto, Bonolo; Setlhalogile, Matlala
    Public procurement is a vital process for governments and state-owned enterprises (SOEs) to procure essential goods and services. However, state capture and unethical practices have plagued it. The State Capture Commission Report highlighted issues such as poor governance, unethical conduct, and insufficient internal control systems. This has led to financial and operational challenges for SOEs, which heavily rely on state guarantees and bailouts. In South Africa, the government spends around R1 trillion annually on procurement, which represent 12% of the country’s gross domestic product (GDP) (National Research Foundation, n.d.). The Auditor General (AG) report for the 2020/21 financial year reported that most SOEs had high balances of irregular expenditures. Transnet had the highest irregular expenditure, totalling R14.1 billion, followed by Eskom with R11.6 billion (Maeko, 2021). This study aimed to identify the underlying governance factors contributing to transgressions in SOE procurement practices and to provide remedial actions to prevent recurrence. Agency Theory was used to examine the identified issues, and a comprehensive literature review was conducted to investigate the underlying factors. The study found that failure to address these governance issues could lead to qualified audit opinions, issues of going concerns for SOEs as well as impact investments and public confidence. The study also revealed that the slow implementation of consequence management could foster a culture of noncompliance and accountability. The current South African public procurement system ca is characterised by political interference and cadre deployment, which undermines transparency, accountability, and good governance. Political appointments and cadre deployment in critical positions encourage wasteful spending, undermine governance, and promote dictatorship. Politicised boards and management in SOEs has led to an increasing prevalence of corruption. The AG, Standing Committee of Public Accounts (SCOPA), National Treasury (NT), Department of Public Enterprises (DPE), and the respective SOEs’ boards have been unable to conduct their oversight functions effectively due to their unwillingness to do the right thing and failure to establish robust preventative controls. The state's approach to board nomination lacks transparency, operates in an ad hoc manner, and is excessively politicised. iii Remedial actions to address these issues require a dedicated commitment from top leadership, fast implementation of corrective measures, and periodic monitoring and evaluation processes. Limiting political interference in the administration of remedial actions can enhance the effectiveness, fairness, and integrity of the anti-corruption process.
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    Assessment of the impact of load shedding on the households of Alexandra, Johannesburg, South Africa
    (University of the Witwatersrand, Johannesburg, 2023) Mbatha, Cebolethu; Kubanza, Nzalalemba Serge
    In South Africa, persistent challenges in the electricity sector have been noted. This study emphasizes that having access to electricity is insufficient; the reliability of its supply is crucial,especially given prolonged power outages faced by a significant portion of the population. In Alexandra Township at two residential areas, 16th Avenue and East Bank, the research used a mixed-method approach, involving questionnaires for 100 households and 20 local businesses, and semi-structured interviews with representatives from the local city authority. Results indicated substantial disruptions to daily lives and operations. These disruptions adversely affected critical social services, hindering operations in essential infrastructures like water supply systems, hospitals, education institutions, and telecommunication systems. The study identifies illegal electricity connections, infrastructure loss, and political interference as perceived major causes of successive power outages in Alexandra. It highlights the worsening nature of load shedding, making it a significant political issue in South Africa, reflecting hardships households and businesses face. The paper recommends governmental subsidies for alternative energy appliances and more favorable electricity tariff rates for households and small businesses to alleviate demand during peak periods. The findings offer valuable insights for policymakers and the South African electricity utility in analyzing trade-offs between negative welfare effects and costs of reducing power outages
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    The socio-economic impact of Eskom’s Just Energy Transition on the town of eMalahleni, Mpumalanga Province
    (University of the Witwatersrand, Johannesburg, 2023) Mamoleki, Maila
    The United Nations Framework Convention on Climate Change (UNFCCC) established the need to reduce global warming by lowering temperatures. This involves the reduction in fossil power plants which are a major source of global warming. South Africa (SA) relies heavily on fossil power plants and Eskom is now transitioning toward the reduction of fossil energy generation. However, the impact of this transition is not yet understood fully. This calls for research into the socio-economic impacts of the transition, specifically in the town of eMalahleni, which is the largest source of coal in SA. Understanding these impacts will therefore assist in designing a transition which minimises the negative impacts and maximises positive impacts. The study adopted a qualitative approach with a case study to understand the socio-economic impacts of the Just Energy Transition (JET) in eMalahleni. Descriptive and thematic analyses were utilised. The study found that this JET would result in a loss of income and jobs, increase social ills and the expansion of ‘ghost towns’ in SA. The results suggest that this impact could be mitigated by using the gradual approach, upskilling plant employees, providing financial support and ensuring fairness between those who will lose their income and jobs and those who will gain jobs and income thus the losers can be compensated. It was concluded that the negative socio-economic impacts of the JET in eMalahleni are inevitable. People of eMalahleni are going to face the negative consequences from the energy transition. It was also concluded that there are positive impacts on the people of eMalahleni from the energy transition such as the improvement in the environment and health of people due to less carbon emissions. However, there are ways to mitigate these impacts, which are far outweighed by the positive impacts the change in power generation would bring. From the research, it is clear that a slow transition would ensure fairness and justice for all employees involved.
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    The impact of independent power producers entering the South African electricity supply industry
    (2020) Mokhethi, Keketso Elijah
    For over a decade, South Africa has been experiencing electricity supply challenges which were mainly due to generation or distribution failures, as well as operational inefficiencies at Eskom; and this raised concerns about the power utility’s ability to guarantee security and quality of supply. In order to address these challenges, several attempts were made in the past to introduce competition in the electricity supply industry, without any material success. The latest attempt has been to accelerate the introduction of Independent Power Producers (IPPs) through the Renewable Energy Independent Power Producer Programme. This study investigated the impact of IPPs gaining access to the South African electricity supply industry which has been dominated by Eskom for a long time; and if the current market conditions are conducive for a competitive electricity market in the country. The study also identified some of the market barriers experienced by different IPPs. A qualitative methodology, premised on an interpretive paradigm, was employed for the collection of data. The study specifically focused on the South African context as a developing country. The sample included experienced individuals who are either currently working or have previously worked in the industry, thereby enhancing the richness of interviews conducted. The study found that the cost of electricity using renewable technologies such as wind and solar PV (generated by IPPs) has reduced significantly and is therefore cheaper than current prices paid by customers which is mainly based on power generated by Eskom using coal, which contributes significantly to the levels of pollution in the country. However, customers are not benefiting from the reduced costs since IPPs sell their power directly to Eskom which on-sells to customers using tariffs that continue to escalate at above-inflation rates. Furthermore, the introduction of IPPs did not result in improved operational efficiencies. The study also found that market entry barriers were low with a few minor challenges. Another finding of the study is that the current electricity market structure is not conducive for competition to prevail and therefore a restructure of the South African electricity market should be considered. The study was original and makes contributions to the theory of public choice and the theory of economic regulation
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    Determinants of Eskom’s key financial ratios
    (2020) Ndlovu, Senzesihle Philani
    This research estimates an empirical model to determine the key drivers of Eskom’s profitability measures. These measures are return on assets (ROA) and net profit margin (NPM). The explanatory variables used were the real GDP growth rate, relative coal price, relative electricity price, USDZAR exchange rate, SA government bond yield, and Eskom’s default risk premium. The paper applies Ordinary Least Squares (OLS) estimation to timeseries data collected from the period 2000 to 2018 using multivariate regression analysis. The study finds that the key drivers of Eskom’s ROA are the growth rate of real GDP and the growth rate of relative coal prices. The growth rate of real GDP has a significant and positive impact on ROA. The second part of the investigation focused on the drivers of Eskom’s NPM. Of the six independent variables tested, only one variable was found to be statistically significant, and that variable was real GDP growth. The growth rate of real GDP has a significant and positive impact on NPM.